bruce mehlman jan. 12, 2017 bruce@mc-dc · rallies & social media. 1. identity politics:...
TRANSCRIPT
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Anticipating 2017
o The Trump Administration (slides 3-9)
o The New Congress (slides 10-18)
o Midterm Elections 666 Days Away (slides 19-23)
o 2016 Lessons for the Boardroom (slides 24-34)
o Parting Thoughts (slides 35-38)
CONTENTS
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The Trump Administration
3
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The Unconventional Candidate Will Be an Unconventional President
The Disruptions Will Continue…
4
PLATFORMS
POLICIES PEOPLE
PARTNERS
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The Road Ahead: …With an Historically Outside-the-Beltway Cabinet…
5
Least Government, Most CEO Experience in Recent Years
Source: NPR analysis of Initial Cabinet officials, updated Feb. 16, 2017
CABINET MEMBERS’
RESUME EXPERIENCE Government Experience
81% 81% 91% 91% 57%
Military Experience
48% 48% 32% 9% 29%
CEO 5% 14% 18% 0% 24%
PhD 19% 24% 9% 23% 0%
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… A Robust Policy Agenda…
LEGISLATIVE
HEALTH CARE (REPEAL 2017, REPLACE?)
INFRASTRUCTURE
TAX REFORM
ENERGY
BORDER SECURITY / WALL
GLOBAL
ASIA (China)
MIDDLE EAST (ISIS, Iran)
EUROPE (NATO, Russia, EU)
AMERICAS (NAFTA)
6
Expect Major Disruptions to Status Quo
REGULATORY
IMMIGRATION ENFORCEMENT
NLRB / LABOR
TRADE ENFORCEMENT
CLIMATE / EPA (Keystone+)
TELECOM (Net Neut+)
CYBER
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The Road Ahead: …Poised for Huge Impact Across Government
7
Supreme Court
Appeals Courts
District Courts
Court of Int’l Trade
TOTAL
Nixon (6 years)
4 45 182 1 232 Ford (2 years)
1 12 52 0 65 Carter
(4 years) 0 56 206 0 262
Reagan (8 years)
3 83 292 6 384 GHW Bush
(4 years) 2 42 149 1 194
Clinton (8 years)
2 66 306 5 379 Bush43
(8 years) 2 63 263 2 330
Obama (8 years)
2 55 268 4 329 Vacancies
(on Day One) 1 16 96 4 117
Sr. status-eligible by / before 2020
N/A 98 216 Sources: Admin Office of US Cts (Appointments); R. Wheeler, Brookings (Vacancies)
Large Immediate Judicial Vacancies Imply Major 4/8-Year Legacy on Courts
Trump opportunities on Day One… 4-8 year totals will be
far higher
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First Two Years Always Critical…
Crime Bill; Brady Bill; Assault Weapons Ban; 100,000 cops
NAFTA; GATT
Reinventing Gov’t Initiative
Deficit Reduction Bill (tax hike)
AmeriCorps
Family & Medical Leave Act
$787B Stimulus package
Affordable Care Act
Dodd-Frank
2010 Tax Deal
Lily Ledbetter Fair Pay Act
No Child Left Behind
2001 Tax Cuts (10-year cuts)
Patriot Act; DHS Bill
US-Russia Nuclear Arms deal
FTAs launched/concluded: Singapore, Chile, Australia,
Morocco, CAFTA
8
Major Initiatives Get Launched Early
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…But Poisonous Partisanship Persists
There Will Be No Honeymoon
Sources: Gallup (historical); Politico (Trump); YouGov (Putin), Jan. 2017
President Approval Disapproval No Opinion Dates of 1st poll
Kennedy 72 6 22 2/10-15/63
Eisenhower 68 7 25 2/1-5/53
Obama 68 12 21 1/21-23/09
Carter 66 8 26 2/4-7/77
Nixon 59 5 36 1/23-28/69
Clinton 58 20 22 1/24-26/93
Bush-43 57 25 18 2/1-4/01
Bush-41 51 6 43 1/24-26/89
Reagan 51 13 36 1/30-2/2/81
Trump 48 46 6 1/5-7/17
Presidents’ Initial Job Approval Ratings in Gallup Polls Democrats & Republicans Both Like Putin Better!
FAV UNFAV
Among Clinton Voters
Putin 8 80
Trump 7 89
Among Trump Voters
Putin 35 51
Obama 9 90
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The New Congress
10
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Congress Is Very New
72% Rs & 52% Ds Never Served Under a GOP President
0
10
20
30
40
50
60
70
Pre-1992 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016
Democrats Republicans
House Members by Year of Arrival
Source: Public dataset, Author’s calculations 11
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The Road Ahead: Majority Were Not Here for Key Legislation Now in Play
12
Percentage of Members of the 115th Congress Who Were Serving When Congress Passed…
House Senate
44%
63% (49 as Senators, 14 in the House)
22%
39%
11%
14%
2.5%
6%
NAFTA
‘86 TAX REFORM
Source: Author’s calculations
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Ambitious Congressional Agenda
TOP GOALS / MUST DO MAJOR PUSH ACTION POSSIBLE
Repeal / Replace Affordable Care Act
Restore Defense spending (fix sequester)
Miners’ pensions bail-out
Comprehensive Tax Reform Trump Infrastructure program Post Office reform
Secure Border / Wall Veterans Administration reform Criminal Justice reform
Rollback regulations (CRA): ~150 Obama regs @ risk
Comprehensive Energy bill IoT cyber security (drones, cars, etc.)
Intelligence reauthoriz. / Patriot Act §702
Dodd-Frank banking reforms (CHOICE Act)
Trade: CFIUS reform, currency
FDA User Fees Budget process reform
FAA reauthorization Comprehensive Telecom Act
CHIP reauthorization / Medicare extenders
Raise debt ceiling + pass ‘17 & ‘18 budgets
13
A Consequential Year Ahead
Source: MCR&T policy analysis
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Both Parties Face Challenges
76 77 76 46 51 51
Dems… Leaders Too Old?
AGE as of 1/9/17
Pelosi Hoyer Clyburn McCarthy Scalise Ryan
GOP… Sufficient Diversity?
97.9%
93.9% 90.2%
86.5%
80.7%
62.3%
52.8%
42%
97.0% 96.0% 97.8% 94.8% 93.9%
90.5%
86.0% 88%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
1950 1960 1970 1980 1990 2000 2010 2017
White Males as a Percentage of Party’s House Caucus, 1950-present
Source: D. Wasserman, Cook Report 14
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Key Congressional Dynamics in 2017
Dem Civil War Begun Over…
15
GOP Civil War Averted But…
Deficit Spend or Revenue Neutral?
Business: Ally or Enemy?
US Role in the World?
Reclaim Checks & Balances?
Fight Trump or Make Deals?
Globalists vs Populists?
Focus on Poor & Minorities or White Working Class?
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Deadlines Will Drive Deliverables
3/15 – Debt Ceiling / extraordinary measures begin 4/28 – FY17 Budget runs out, extension or shut down 9/30 – FAA funding runs out 9/30 – CHIP funding runs out 9/30 – FY18 Budget must pass (or shut down) 9/30 – FDA User Fees end unless renewed 9/30 – Flood Insurance program expires 12/31 – FISA §702 – Government surveillance 12/31 – Tax extenders & ACA taxes (e.g. Medical Device, Health Insurance)
Key Legislative Deadlines in 2017
16
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0
50
100
150
200
1141131121111101091081071061051041031021011009998979695
Senate Progress Risk = Filibuster
Democrats Can Block All Legislation Other Than Non-Supreme Court Nominations & Budget Reconciliation Votes
CONGRESS
# Cloture Votes = # Filibusters
Number of Filibusters Has Been Growing Each Congress
17
2015- 2016
2009- 2010
2001- 2002
1987- 1988
1979- 1980
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House Progress Risk = Deficit Attention Disorder
Sources: Campaign for a Responsible Budget, Jan. 2016; May 2016; Title by Kevin Madden, HPS
Cost of Trump Campaign Proposals (avg. est.) Tax Reform: $9.3 trillion Health Reform: $0.55 trillion VA Reform: $0.5 trillion Defense: $0.45 trillion Infrastructure: $0.137 trillion
“Revenue Neutrality” Makes Most Proposals Harder to Pass
18
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666 Days Until the 2018 Midterm Elections
(from 1/9/17)
19
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The Road Ahead: Trump Enters WH After 8 Years of Republican Gains
20
GOP in the Age of Obama
Source: National Council of State Legislators, Dec. 2016
+57%
+30%
Governors Senators Congressmen State Legislators
States Fully Controlled (both state houses &
Governor)
+35% +30%
+167%
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2018 Senate Battlefield Favors GOP Dems defending 25 total states, 10 Trump won GOP defending 8 total, only 1 Clinton state (NV)
21
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-61 +8
-52 -8
-26 -15
-12 -47
-4 -18
-45 +9
-49 -10
-75 -59
-57 -21
-116 -85
-12 -33
-9 -31
-3
-120 -100 -80 -60 -40 -20 0
2010-Obama (D)2002-Bush (R)
1994-Clinton (D)1990-Bush (R)
1982-Reagan (R)1978-Carter (D)1970-Nixon (R)
1966-Johnson (D)1962-Kennedy (D)
1954-Eisenhower (R)1946-Truman (D)
1934-Roosevelt (D)1930-Hoover (R)
1926-Coolidge (R)1922-Harding (R)1914-Wilson (D)
1910-Taft (R)1898-McKinley (R)
1894-Cleveland (D)1890-Harrison (R)
1886-Cleveland (D)1882-Arthur (R)1878-Hayes (R)1870-Grant (R)
1862-Lincoln (R)
Elec
tion
Year
-Pre
side
nt
House Loss by President’s Party in First Midterm Election (1862-2010)
House Seat Change
First Midterm Election Usually Bad for Incumbent Party
Dems need to win 24 seats in 2018 to
regain House
22
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House May Be “Too Gerrymandered to Fail” for GOP
23 House Republicans in seats carried by Clinton 12 House Democrats in seats carried by Trump
Only 15 / 241 Republicans won by less than 10%
17 / 194 Democrats won by less than 10%
Sources: Cook Report & Sabato 23
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2016 Lessons for the Boardroom
24
1. Offer a Clear Brand 6. Reassess Political Risk & Strategy 2. To Get Coverage, Make News 7. Remember Everything Is On the Record 3. Don’t Fight the Last War 8. It’s Time to Rebuild Trust 4. Secure Core Customers First 9. Build Bipartisan Alliances 5. Broaden Stakeholder Engagement 10. Play the Long Game
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The Road Ahead: #1. OFFER A CLEAR BRAND
25
Great Brands Relentlessly Communicate Values
Everything Trump Did Reinforced His Clear Brand: Strong + Change
What Was Clinton’s Brand?
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The Road Ahead: #2. TO GET COVERAGE, MAKE NEWS
26
Also Look to Alternative Channels, Direct-to-Consumers Trump Earned Half of all TV Mentions
(Sept 1, 2015-Jan 1, 2016) "It may not be good for America, but it's damn good for CBS…
The money's rolling in and this is fun.”
Sources: Hollywood Reporter (Moonves); USA Today (Sunday Shows)
-- Les Moonves, President of CBS
Sources:: Echelon Insights (TV mentions); Twitter, Facebook & Instagram 1/9/17.
Twitter 19.2M
Facebook 17.3M
Instagram 4.6M
Trump’s Virtual Army APPEARANCES ON SUNDAY TALK SHOWS
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The Road Ahead: #3. DON’T FIGHT THE LAST WAR
27
Past Performance is No Guarantee of Future Returns
Clinton Re-Ran Obama ‘12 Campaign Trump Innovated to Win
1. Policy: Reject orthodoxy on trade to win new voters.
2. Brand: Run against DC elites including GOP leaders.
3. Medium: Take message direct-to-voters via huge rallies & social media.
1. Identity politics: Micro-target specific groups via analytics.
2. Attack Ads: Define opponent as “unfit” via TV barrage.
3. Safe States: Assume Big Blue Wall will hold & try to win red states (e.g. AZ, GA, NC).
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The Road Ahead: #4. SECURE “CORE CUSTOMERS” FIRST
28
Don’t Assume Elites Speak for Their “Followers”
86%
14%
Union Election Spending (controlled by Leaders in Washington)
51% 42%
7%
Union Household Voting (workers voting with their feet)
Sources: Center for Responsive Politics (Spending); Exit Poll (Voting)
Support for Dem Support for GOP
Other / Did Not Say
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The Road Ahead: #5. BROADEN STAKEHOLDER ENGAGEMENT
29
You Need a Whole Foods Strategy AND a Cracker Barrel Strategy
20%
30%
40%
50%
60%
70%
80%
1992 1996 2000 2004 2008 2012 2016
Counties with Whole Foods Counties with Cracker Barrel
Dem share of vote in counties with Whole Foods
Dem share of vote in counties with Cracker Barrels
20 25
44 48
54
41 32
Source: D. Wasserman, Cook Report
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The Road Ahead: #6. REASSESS POLITICAL RISK & STRATEGY
30
Challenges Are Accelerated, Viral & Reputational
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The Road Ahead: #7. REMEMBER EVERYTHING IS ON THE RECORD
31
Privacy Is Dead & Cyber Is a CEO (not CIO) Problem
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Look to Alternative Partners, “Good Works” & Community Solutions
0 10 20 30 40 50 60 70 80
CongressBig BusinessNewspapers
TV NewsCriminal Justice System
Organized LaborBanks
Public SchoolsUS Supreme Ct
PresidencyMedical System
Church / Org. ReligionPolice
Small BusinessMilitary
Confidence in Institutions (Percentage of Voters with a “Great Deal “or “A Lot” of Confidence in:)
You are here
Source: Gallup, June 2016
Hardly a coincidence Trump
picks generals & entrepreneurs
32
#8. IT’S TIME TO REBUILD TRUST
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The Road Ahead: #9. BUILD BIPARTISAN ALLIANCES
33
Unilateral Accomplishments Rarely Endure
Walking Dead Built to Last
42 Republicans + 12 Democrats Senate: 60 Democrats + 0 Republicans
FCC: 3 Democrats + 0 Republicans
0 lawmakers voted to ratify
House: 236 Republicans + 178 Democrats
1996 Telecom Act
Medicare Pt. D
Passed Senate by Unanimous Consent
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#10. PLAY THE LONG GAME
Passed longest highway bill since 1998. Enacted permanent “Doc Fix” after 17
temporary bills. Passed first Trade Promotion Authority
since 2002. Passed first update to chemical and toxic
substance oversight authority in 40 years. Made R&D tax credit (and many others)
permanent after 20 years of annual, temporarily extensions.
Provided debt relief to Puerto Rico. Enacted landmark medical innovation /
Cures Bill.
Passed first major education reform since No Child Left Behind (2002).
Reformed NSA’s bulk surveillance program.
Repealed 1975 Oil Export ban. Incentivized cyber security information
sharing via landmark law. Passed 1st Customs Bill (MTB) in 6 years. Enacted landmark bill to encourage
commercial space launch & exploration. Updated Water Resources Development
Act. Provided funding for Opioid epidemic.
114th Congress Was Far More Impactful Than You Thought…
Those Who Engaged Shaped Major Outcomes
34
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PARTING THOUGHTS
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The Road Ahead: IT’S A TOUGH JOB
36
But If Trump’s Truly Changing All the Rules…
Before
After Before Before After
After?
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DEMOCRACY IS A BARGAIN
$105.9
$23.0 $18.9
$15.5 $13.5 $12.2 $10.8 $7.5 $3.8 $2.6 $1.3
Beer Pet food Valentine'sday
Super BowlSpending
PlasticSurgery
Ice cream Uber Potato chips Airlinebaggage fees
2016Presidential
Election
Christmastrees
Americans' Annual Spending…
SOURCES: Open Secrets, Washington Times, IBIS, Yahoo, Research America, RITA, Market Watch, Reuters, Tech Crunch, ABC News, American Pet Products 37
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CHANGE IS IN THE AIR
38
OUT IN
Davos Des Moines
GOP Civil War
DEM Civil War
Press conferences
Tweet storms
Sustainability initiatives
On-shoring manufacturing
Opposition research
Hacking
ObamaCare
TBD
GOP state AGs sue to block Obama Administration
DEM state AGs sue to block Trump Administration
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